Harry Henderson, chairman of the £1.1bn trust, said: "We felt that markets were acting over-emotionally and positioned the portfolio so that Witan would benefit from a recovery once the immediate uncertainties were overcome. This allowed us to recover part of the lost ground during the final quarter of the year."
He added that during the rally seen since the year-end Witan had managed to recoup the whole of last year’s absolute decline and most of its underperformance.
The trust was geared and had a "moderately positive outlook" for global economies, which Witan admitted was out of tune with the prevailing market mood, dominated as it was by concerns about the eurozone’s problems.
But these two factors are also what have enabled the trust to outperform so far this year, in the recovery phase.
The investment company increased its dividend for the 37th consecutive year, paying a full dividend for the year of 12p, compared to 10.9p the year before.
Witan also said it had been able to reduce its TER which, including performance fees, was down to 0.87%, versus 1.07% a year earlier.
Henderson said Witan was able to pay a higher dividend because of the strong growth in revenue from dividends seen during 2011, which also enabled the company to add £2.6m to its revenue reserves.
The reserves now stand at £40.8m, the equivalent of 1.7 years’ dividend payments.
Henderson concluded: "We have a policy growing our dividend in real terms ahead of inflation and over the past 10 years dividends have risen 51%, compared with 29% for the consumer price index."
The Witan Investment Trust’s benchmark is 40% FTSE All-Share Index, 20% FTSE All-World North America Index (£), 20% FTSE All-World Europe (ex UK) Index (£) and 20% FTSE All-World Asia Pacific Index (£).
At the year-end the trust had 45.8% invested in the UK and 20.1% in North America, versus 43.7% and 17.7% respectively a year earlier.
Its highest conviction holding is Veritas Asset Management, which is 11.3% of the portfolio and has a global equity mandate.
